Choppy oil action with expanded intraday volatility suggests a turning point is occurring in this market sector. Oil prices have risen alongside stock prices as both are following a similar thought process that the world economic recovery is bolstering demand for commodities and stabilizing stocks. Employment has turned, inflation is contained, access to low interest loans remains. The stage is set for strong economic expansion - right? Wrong! What the world is experiencing is 100s of billions of dollars infused globally into a broken system. It is funny how analysts often suggest employment is a lagging indicator when employment is on the decline, but when it is showing strength the market accepts it as bullish instead of realizing it is a lagging effect of the stimulus that has supported global markets. Oil is strongly tied to this psychology and when it all comes crumbling down in the coming weeks and months then oil prices will likely slide substantially to sub-$70 prices. Play this trend shifting move using bear put spreads on crude oil.

Financials

The S&P is congesting near the highs and I am issuing a strong sell recommendation near current prices, anticipating a significant price collapse in coming weeks. I invite you to subscribe to Mound Trade Signals for details on the trade recommendation. Bonds are expected to rally off the stock market decline, offering a run to 120 on the 30r. in short order. The U.S. dollar remains a breakout buy with a strong surge coming off this upcoming stock market selloff, pushing the dollar to the nearest target of 84.20.

The euro should see follow through weakness supported by stock market declines and Greece's grab of the EU and IMF bailout money. The EU should never have agreed to such a low interest rate - it made the deal too tempting in my opinion. Even if Greece could stabilize without it, why not borrow money at 20-30% off currently accessible interest rates? The Canadian dollar is a sell here using long term puts. The Australian dollar is also a sell with futures and a stop above 95. The Japanese yen remains a strong buy on a breakout forecast that should begin almost immediately.

Grains

Wheat continues to impress as short covering and general market fundamentals create a value buying opportunity, while corn remains technically and fundamentally bearish. Solid weather puts a bearish slant on corn, but take it with a grain of salt (no pun intended) as this time of year weather is king and causes an emotional rollercoaster if followed too closely. Beans remain a strong sell long term as a supply cycle shift creates a bearish imbalance with this year's harvest. Consider buying bean oil and selling meal as a long term spread.

Meats

After a record livestock slaughter the cattle market is set to collapse from its recent price surge, offering the most impressive put buying opportunity I have seen in years. Hogs may be developing a bear turn but I suggest waiting this one out for a bit.

Metals

Gold and silver offered a reasonable rebound from the previous Friday's price plunge, however I continue to expect the market to fill out the bottom side of a monthly chart which means that for my forecast to hold up that somehow gold will drop more than $50 in the next 5 trading days. Silver would follow suit. Copper remains a sell.

Softs

Coffee remained quiet as it tested nearby support around 127, and remains a long term buy. Cocoa spiked on private industry forecasts for rising demand and dry conditions in the Ivory Coast. This is a great put buying opportunity here to play opposite this move. Cotton is a strong buy after holding up off recent support. OJ continues to represent a bear market following a sell-the-news move after the Florida frosts. Sugar is a buy with straight calls, with strong volatility premium expected to come into the market on a spike rally. Lumber's recent price surge is strong but likely to experience a pullback to 290 before ultimately heading to around 350.

James Mound is the head analyst for www.MoundReport.com, and author of the commodity book 7 Secrets. For a free email subscription to James Mound's Weekend Commodities Review and Trade of the Month, click here.